TO BOOST INVESTOR CONFIDENCE
Zhu Linjun, a veteran Chinese investor living in Shanghai, was excited upon hearing the MSCI decision. He took a selfie with a V-hand gesture and uploaded the picture to a social networking app at midnight, collecting dozens of "likes" in just a few minutes.
"This is big good news for the A-shares market that has suffered turbulence for long," said Zhu, who has seen bulls and bears in China's stock market.
Although initial capital inflows following the decision may not produce material influence on the A-shares, China's stock shares being added to the global investor giant's portfolio will further boost investor confidence, Zhu said.
Qiu Yanying, chief advisor of Pinjin (Beijing) Asset Management who has worked in private placement for over 20 years, seemed cool-headed in response to the highly expected inclusion. He believed that as the world's second largest equity market, the A-shares has gained its international status commensurate with its volume; meantime, the accession of Chinese stocks enables MSCI's global coverage to be more complete.
Qiu said frequent interaction between A-shares and MSCI manefested a process of continuous self-improvement and opening up of China's capital market.
"Entry to global key indexes has indicated that the Chinese stock market has become increasingly international. And global investment styles that emphasize value play are expected to subtly influence China's speculative and volatile stock market, which is another significance of the inclusion," Qiu said.
TO DELIVER MORE CHINESE DIVIDENDS
Market analysts have spoken highly of the MSCI decision.
Brendan Ahern, chief investment officer at Krane Fund Advisors, told Xinhua on Tuesday that the MSCI inclusion begins "adjusting China's weight within global equity indices to match its importance to the global economy."
Tom Orlik, chief Asia economist for Bloomberg Intelligence, said in an interview with Xinhua on Tuesday that MSCI inclusion confirms and will accelerate the trajectory of China's capital market opening.
"China's policymakers have already made important strides in opening capital markets to global investors...MSCI inclusion should be a catalyst to accelerate that process - working to maximize gains to efficiency from global integration and minimize disruptions from destabilizing short-term flows." Orlik said.
Earlier, Zhang Xiaojun, a spokesman for the China Securities Regulatory Commission (CSRC) said the commission is pleased to see the inclusion of A-shares into the MSCI index and welcomes the decision, adding that China's stock market and its whole capital market will not change the direction of reforms toward being more market-oriented, law-based and internationalized.
Zhang has also noted that any merging markets stock index is "incomplete" without Chinese shares.
Observers believe MSCI's inclusion of A-shares can be seen as the outcome of the reform and evolution of China's capital market as well as an opportunity for global investors and the Chinese market to better interact with one another.
As the size and development dividends of the Chinese capital market cannot be overlooked, adding A-shares to the MSCI portfolio will help China further push forward its financial reforms and in return benefit the world by delivering more Chinese dividends.
